An aging of a company's accounts receivable indicates that $9000 is estimated to be uncollectible.If Allowance for Doubtful Accounts has a $2400 balance the adjustment to record bad debts for the period will require a(n)
A)increase to Bad Debt Expense for $9000.
B)decrease to Allowance for Doubtful Accounts for $6600.
C)increase to Bad Debt Expense for $6600.
D)increase to Allowance for Doubtful Accounts for $9000.

Question

Quizplus · Accepted Answer

The aging of accounts receivable indicates that $9000 is estimated to be uncollectible, which means the company needs to record a bad debts expense of $9000. However, since the Allowance for Doubtful Accounts already has a balance of $2400, the adjustment will only require an increase to the Bad Debt Expense account for the remaining estimated uncollectible amount of $6600. Therefore, choice C is the correct answer.

An Aging of a Company's Accounts Receivable Indicates That $9000